The new Medicare Part D program created by the Medicare Modernization Act categorically excludes benzodiazepines (BZDs), a mainstay of treatment for anxiety disorders, except for those patients with supplemental or Medicaid insurance. This exclusion, in effect since January 2006, is based on studies showing that BZD use in the elderly increases the risk of falls and hip fractures, and worsens conditions such as emphysema, urinary incontinence, and depression. This exclusion will likely improve health outcomes for elderly Medicare beneficiaries who are using BZDs inappropriately or have health conditions that are worsened by BZD use. However, it may worsen health outcomes for patients being treated appropriately with BZDs for anxiety disorders, especially if they are withdrawn abruptly from the medication or switched to less appropriate or efficacious psychotropic drugs. We examine the implications of the loss of BZD coverage resulting from the Medicare Part D exclusion using linked prescription drug, behavioral and medical claims for UnitedHealth Group Medicare Advantage plan beneficiaries enrolled since 2004. To assess short-term effects, we examine enrollees who had been using BZDs, both appropriately and inappropriately, before Medicare Part D began. To explore the long- term implications for cost and quality, we analyze treatment patterns among patients with anxiety diagnoses. Our specific aims are to examine the association between Medicare Part D implementation and 1) use and cost of psychotropic drugs other than benzodiazepines, and behavioral outpatient visits; and 2) hospital stays, emergency department visits, medical outpatient visits and total costs (also broken down by type). Our research uses pre-post and quasi-experimental study designs, using patient groups whose BZD coverage is unaffected by the Medicare Part D exclusion to control for secular time trends. Our research contributes to public health by looking at how one of the biggest health policy initiatives in recent history affects treatment of anxiety disorders, which are among the most prevalent and costly mental illnesses, and whether the loss of BZD coverage resulting from the Medicare Part D exclusion will lead to health care savings or costs. Our findings will inform the ongoing debate over amending Part D legislation to include BZD coverage by providing objective data to guide policymakers on the likely costs and benefits. [unreadable] [unreadable] [unreadable]